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Friday, 26 October 2012

MILAN (Reuters) - Former Italian Prime Minister Silvio Berlusconi was sentenced to four years in jail on Friday for tax fraud in connection with the purchase of broadcasting rights by his Mediaset television company.

The 76-year-old billionaire media magnate, who was
convicted three times during the 1990s in the first degree before being
cleared by higher courts, has the right to appeal the ruling two more
times before the sentence becomes definitive.
That process is likely to be lengthy and he will not be
jailed unless he loses the final appeal. Even then, because the crime
was committed when an amnesty to prevent prison overcrowding was in
place, the maximum possible jail time would be one year.
The ruling comes two days after Berlusconi confirmed he would not run in next year's elections as the leader of his People of Freedom (PDL) party, ending almost 19 years as the dominant politician of the centre-right.
Milan judge Edoardo d'Avossa told a packed court that
between 2000 and 2003, there had been "a very significant amount of tax
evasion" and "an incredible mechanism of fraud" in place around the
buying and selling of broadcast rights.
The court's written ruling said Berlusconi showed a "natural capacity for crime".
During a phone call to an evening news broadcast on one
of his own channels, Berlusconi said there was no link between his
decision pull out of politics and the Friday ruling, and slammed the
court for being politically motivated.
He called the verdict "political and intolerable," and said it showed Italy had become uncivilized, barbaric and was no longer a democracy.
Berlusconi lawyers Piero Longo and Niccolo Ghedini said
the ruling was "totally divorced from all judicial logic", adding that
they hoped the "atmosphere" at the appeals courts would be different.
Berlusconi, one of Italy's richest men, became prime
minister for a second time in 2001 after winning a landslide election
victory. Even while he was prime minister, he remained in effective
charge of Mediaset even though he had handed over control of day-to-day
operations, the court said.
The four-time prime minister and other Mediaset
executives stood accused of inflating the price paid for TV rights via
offshore companies controlled by Berlusconi and skimming off part of the
money to create illegal slush funds.
The investigation focused on television and cinema
rights that Berlusconi's holding company Fininvest bought via offshore
companies from Hollywood studios.
The court also ordered damages provisionally set at 10
million euros ($13 million) to be paid by Berlusconi and his
co-defendants to tax authorities.
"POLITICAL HOMICIDE"

The flamboyant Berlusconi, who is still on trial in a
separate prostitution case, resigned as prime minister a year ago as
Italy faced a Greek-style debt crisis, handing the reins of government
to economics professor Mario Monti.
Angelino Alfano, secretary of the PDL, said the ruling
proved once again "judicial persecution" of the media magnate, while
political rival Antonio Di Pietro, a former magistrate, hailed the
decision, saying "the truth has been exposed".
Should the ruling be confirmed on appeal, Berlusconi
would also be forbidden from holding public office for five years, and
from being a company executive for three years.
"This is not a sentence, but an attempt at political
homicide," Fabrizio Chicchito, the PDL's chief whip in the Chamber of
Deputies, said referring to the ban on holding office.
Now that Berlusconi has said he will pull out of
politics, he may be focusing more on his business empire, which includes
Mediaset, AC Milan soccer club, and Internet bank Mediolanum.
Shares in Mediaset, Italy's biggest private
broadcaster, fell as much as 3 percent after the ruling, and are down
about 50 percent in the last year.
The broadcaster has been struggling against rivals like
News Corp's broadcaster Sky Italia and a host of online media, while
its core advertising revenues are feeling the pinch of the recession.
The court acquitted Mediaset chairman and long-term
Berlusconi friend Fedele Confalonieri, for whom prosecutors had sought a
sentence of three years and four months.
Berlusconi has owned AC Milan since 1986 and the club
have been European champions five times under his leadership. But the
its fortunes have dipped in the past couple of seasons amid cost
cutting, prompting repeated rumors of its possible sale.
He also is still on trial in the separate "Rubygate"
case in which he is accused of paying for sex with a teenaged nightclub
dancer when she was under 18 and thus too young to be paid legally as a
prostitute. He denies the charges.